The Numbers

In the report, Bank of America raised its price objective for FireEye from $44 to $49. The new target represents a 8.1x 2016 enterprise value to sales ratio (EV/S), which is typical for the high-tech growth space but slightly higher than the 6.5 average for other security names.

Rapidly-Scaling Business Model

Analysts point out that FireEye appears to be rapidly reversing operational losses. Revenue expanded by a whopping 163.5 percent in 2014, and margins expanded from -82.9 percent to -64.9 percent. The operational improvements are showing no signs of losing steam as of late, as margins improved from -63.5 percent in Q3 to -39.5 percent in Q4.

Bank of America is projecting margins of -44.4 percent for 2015.

Upside To Forecasts

Bank of America projects 37.7 percent growth in billings and 44.4 percent growth in revenue for FireEye in 2015. Over the past three quarters, FireEye has grown billing at an annualized rate of 118 percent and revenue at an annualized rate of 100 percent.

Analysts believe that these strong numbers suggest there is likely some upside to their relatively modest 2015 projections.

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